The Justice Department announced the conclusion of its inquiry into cost overruns during the refurbishment of the Federal Reserve under Chairman Jerome Powell. U.S. Attorney Jeanine Pirro stated that the Federal Reserve’s Inspector General has been tasked with examining the construction expenses. Pirro emphasized the IG’s ability to ensure accountability to taxpayers and requested a detailed report promptly to address the concerns that prompted subpoenas.
Although Pirro expressed willingness to relaunch a criminal investigation if warranted, a recent court ruling halted subpoenas to the Fed’s board following allegations of improper pressure on Powell by President Donald Trump to adjust interest rates rapidly or resign. Powell’s term as chair is due to conclude on May 15.
The investigation by Pirro influenced Powell’s decision to remain a Fed governor until 2028, aligning with the end of Trump’s presidency. The Trump administration’s actions, including the criminal probe, posed a potential delay in the Senate confirmation of Kevin Warsh as Powell’s successor. Sen. Thom Tillis criticized the probe as an attack on the Fed’s autonomy, vowing to block Warsh’s confirmation until the matter is resolved.
Democrats and former Fed leaders condemned the investigation as an attempt to undermine the Fed’s independence from the White House. Three of the current Fed governors were appointed by President Joe Biden, including Lisa Cook, whose dismissal is being pursued by the Trump administration.
Senator Elizabeth Warren criticized the announcement as a ploy to facilitate Warsh’s nomination, highlighting concerns about the Cook case and the potential revival of the Powell probe. Warsh emphasized the importance of monetary policy independence and denied making any commitments to Trump regarding interest rate adjustments. He attributed the inflation surge post-COVID-19 to the central bank’s policies under Powell’s leadership.
